Promotion is a powerful tool that can help Amazon sellers fulfill a wide range of goals. By running promotions you can boost short-term sales, generate reviews for new products, and move stale inventory to name a few. Before running a promotion you will want to decide carefully on what you’re trying to accomplish and the details of your promotion. Here are the steps to creating an effective Amazon promotion strategy.

Decide on the products and type of promotion you are going to offer

First, let’s look at if you will be promoting a brand new product or an existing product. For new products, you may want to start off with a discount of 10-15 percent off. If you’d like to quickly generate exposure or increase reviews you could consider a giveaway which is typically 70 to 80 percent off. Be careful though to make sure you’re not losing too much money by giving away too many units. For existing products that are slow-moving or where there is excess inventory you could try a discount of 50 percent to help boost sales and generate interest. Lightning deal and holiday promotions such as Black Friday vary widely but average around 50 percent off as well.

Another great way to increase sales is by cross-selling. Here you should identify products that are often purchased together such as cell phone cases and screen protectors. You can then offer a buy one get 10 percent off the second to increase demand for both products. Don’t worry if your products are not in the same category. Buyers often purchase seemly unrelated products together. By offering promotions you can help buyers discover products they wouldn’t have found otherwise.

Example of cross-selling deal on Amazon

Example of Lightning deal on Amazon

Products purchased together are often from different categories

Decide when to run the promotion

The timing and duration of your promotion will have a big impact on its effectiveness. If the promotion is too short, then buyers will not have enough time to find and redeem it. If it is too long, then buyers will lose the sense of urgency to buy quickly.

For example, cross-selling promotions typically last 3 to 4 weeks, which helps boost long-term sales. Whereas new product giveaways are typically much shorter. They last just one to two weeks, which will generate the maximum number of reviews and interest for your product in a short period of time. Lightning deals are even shorter. They last just 4 to 6 hours with the exact time determined by Amazon. You can however, select the week you want to run the promotion. Make sure to submit lightning deals for busy shopping days such as Prime Day and Black Friday to reach the maximum number of buyers. Finally, for seasonal products try running an end-of-the season promotion to help clear out inventory and make room for new products.

Decide on number of units available

Next, decide on the ideal number of units required for the success of your campaign while limiting losses. For example, let’s say you are planning a new product giveaway. Each unit retails at $20, and you are planning to offer 50 units at 80% off. Therefore, you will be giving up $20 * 0.8 * 50 units = $800 in revenue to run the promotion. While that may seem like a big loss, many sellers consider giveaways crucial for generating interest and increasing sales down the line.

Measuring promotion effectiveness

Another key step is to make sure you know how to measure the effectiveness of each promotion. For example, on a cross-selling promotion where you offer 15% discount off a second product, you could set a goal to boost the average order amount by 20%. Or by giving away 50 units you can expect to get 5 reviews and set a target sales rank under 50,000. For liquidations, you can calculate how much you save on storage fees by selling excess inventory. Whether or not you were able to reach your goal, you will want to carefully examine what strategies worked well and what changes you need to make.

Optimize Amazon promotion strategy with BigTracker

Finally, we’ll show you how to use BigTracker to optimize your Amazon promotion strategy. With BigTracker you can monitor your competitor’s promotions and their product sales. You can use this information to create your own counter strategy. For example, let’s say you sell external CD drives. We search for “external CD drive” within the Deal Tracker to find many of the top sellers rely on Lightning Deals to boost sales. You also see that several competitors offer discounts around 60 percent with deal prices in the $20 range. You may decide that in order to stay competitive you need to run your own Lightning Deals at 60 percent discounts or greater.

A complementary feature to the deal tracker is to use deal alerts. With deal alerts, you will be notified via email whenever your competitors run a promotion

Another powerful feature is to add you and your competitor’s products to the “Product Compare” chart. Here you can measure you and your competitor’s performance over time. In the example below, we can see that both phone cases are trending downward. However, due to the first brand running a promotion they see a boost in sales for several days before evening out. Depending on their costs and goals, this may be a successful promotion for them.

Below is a summary of the various types of promotions strategies that sellers use. We encourage you to experiment with different types of Amazon promotion strategy to find the one that works for you.